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Changing accounting date - help please
toby_puppy
Posts: 620 Forumite
in Cutting tax
Normal year end for a self employed decorator = 7 September.
Client now wants to run accounts to 5 April 2013, but that would exceed the maximum basis period of 18 months.
Instead, could he enter year end 7 September 2012 accounts on the 2012-13 Tax Return self employed page and then another self employed page on the 2012-13 Tax Return covering 8 September 2012 - 5 April 2013?
Would the year ended 7 September 2012 be classed as cessation accounts and would he need to use his overlap relief on these accounts (was hoping to be able to carry it forward as profits are below personal allowance)
Technically, he will be operating the same business but he wants to bring the year end in line with the tax year end as he is doing a lot of CIS work with 20% deductions, so it would be easier for him to budget for tax etc if year end was the same.
Thanks.
Client now wants to run accounts to 5 April 2013, but that would exceed the maximum basis period of 18 months.
Instead, could he enter year end 7 September 2012 accounts on the 2012-13 Tax Return self employed page and then another self employed page on the 2012-13 Tax Return covering 8 September 2012 - 5 April 2013?
Would the year ended 7 September 2012 be classed as cessation accounts and would he need to use his overlap relief on these accounts (was hoping to be able to carry it forward as profits are below personal allowance)
Technically, he will be operating the same business but he wants to bring the year end in line with the tax year end as he is doing a lot of CIS work with 20% deductions, so it would be easier for him to budget for tax etc if year end was the same.
Thanks.
0
Comments
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I think the way to do this is to draw up accounts from 6 April 12 to 5 April 13, along with 7 sept 11 to 7 sept 12. This would give rise to further overlap profits rather than using up the overlap relief already in existence, if I remeeber my business tax exam revision properly!
See http://www.hmrc.gov.uk/helpsheets/hs222.pdf page 6, which I think confirms this.0
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